by Property Soul

Property news from the media can be very confusing these days. Headlines of articles on a single day can be totally contradictory to each other.

On Monday August 14, Business Times had an article “Analysts upbeat on property, tech after Q2’s mixed earnings”. Flip the Straits Times on the same day and there’s a headline “More firms closing amid tough economy”.

Such inconsistencies make readers wonder: Is the recovery of the real estate industry independent of the economic slowdown? Should we be upbeat about the property market regardless of the tough business environment?

An unanimous media support for market recovery

Newspaper articles that talk about bottoming-out of the property market used to appear only on weekends – when there are pages and pages of advertisements of new launch, re-launch and overseas projects.

That we understand.

But recently, whenever there’s a new launch, a Chinese developer won the top bid, or an en bloc sale was concluded or listed on the market, the journalists will automatically emphasize the fact that this is another sign of bottoming-out or recovery of the property sector.

Without fail, the reports will continue with the interviews and quotes from industry stakeholders – developers, property agencies, market analysts, mortgage banks, credit firms, etc. – all singing the same tune.

On the same week on August 16, Business Times published another article “Buying momentum buoys July sales of private and EC homes”.

With aggressive marketing and positive sentiments spread by the media, another two successful new launches resulted in higher July sales volume for new project sale. The article immediately concluded that the data is “reflecting a buoyant buying momentum that analysts believe will continue for the rest of this year and the next”.

As expected, this was echoed by the quote of a property agency spokesperson who mentioned “potential buyers have likely come to terms with the prevailing cooling measures and have been prompted to act on news that a possible uptick in pricing is looming”.

Another property agency supported the argument by adding that “the recent uptrend in land prices suggests higher prices for new projects next year, many buyers are deciding to commit to a purchase now rather than later”.

After reading similar articles, we will definitely have more new launches, more property buyers, higher agent commission, higher mortgage sales, better quarterly results, more positive articles, better market sentiments, more land sales, higher bid prices, more en bloc sales … everybody is happy and SPH reports another quarter of impressive results with high net profit.

Wide guess from international media

On August 14, Bloomberg published an article “Hong Kong’s Property Shadow Leaves Singapore Developers Ahead”. Business Times and Today immediately picked up the article the next day.

Below are some statements from the Bloomberg article:

“Hong Kong home prices have shot ever higher, bouncing back from the global financial crisis and periodic bouts of government cooling, while Singapore residential prices have declined 12 percent from a peak, dropping for 15 straight quarters.

A 70 percent divergence in home prices in Singapore and Hong Kong over the past six years is due for a reversal, according to Morgan Stanley. Singapore developers score better in terms of affordability for buyers, a tight home supply, and a potential easing of policy measures.

The bank’s analysts forecast Singapore residential property prices to rise 5 percent in 2018.”

There are some fundamental faults in the assumptions and predictions in this article.

Firstly, just because “Singapore residential prices have declined 12 percent from a peak, dropping for 15 straight quarters” while doubled or tripled Hong Kong property prices still show no sign of weakness doesn’t make Singapore’s property market look more attractive.

Any asset with its value depreciated for years doesn’t necessarily mean that it will enter a boom market soon (look at what happens in Japan’s market). For prices to go up again, there must be elimination of negative factors and emergence of positive factors before turning the corner.

And who says Singapore has a “tight home supply”?

Unlike Hong Kong, we have HDB flats and the supply is determined by the government. For private residential properties, there are still over 46,000 units in the pipelines. The government hasn’t stopped releasing new sites and we have just started the new round of en bloc fever.

Lastly, what do they mean by “potential easing of policy measures”? Monetary Authority of Singapore just emphasized again on June 29 the nth time that “they remain necessary” and “easing the measures now would send a wrong signal”.

How well does Bloomberg know about the Singapore property market?

What about market data showing the opposite?

If you are not only reading news from SPH, MediaCorp or Bloomberg, it is not difficult to find conflicting property data or reports from other sources.

1. SRX

SRX Media Report for Private Resale Non-Landed – July 2017
– Private Resale Non-Landed Prices Decrease 0.5% in July; Volume Decreases by 9.7%

2. URA

Release of 2nd Quarter 2017 real estate statistics
– Prices of private residential properties decreased by 0.1% in 2nd Quarter 2017.
– Prices of landed properties declined by 0.3%. Prices of non-landed properties declined by 0.1%.
– Rentals of landed properties fell 0.1%. Rentals of non-landed properties decreased by 0.2%.


– “Singapore’s residential property market is sending mixed signals. This is what they mean” (CNBC, Jun 14)

Conclusion: We really need to look for data and reports released by more “neutral” parties, especially when we are talking about buying big ticket items like properties.

How does real bottoming-out or recovery look like?

Market recovery is all about facts and figures. There is no need to look for “signs”. We are not talking about superstition or sickness here.

Below are 3 critical sets of data to prove that there is really a market recovery:

1) Higher (or at least growing) demand over supply in the market. Problem of oversupply solved.

2) Resale (not new sale) volumes and prices show “meaningful” increase for a few quarters.

3) Rental prices and vacancy rates show consistent improvement.

Still in doubt? Allow me to reinstate the characteristics of the “6 stages of a property cycle” from my book No B.S. Guide to Property Investment – Dirty Truths and Profitable Secrets To Building Wealth Through Properties.

Honestly, I don’t think the market is even bottoming-out. We are at most in between the stages of consolidating or correcting stage. And it is far too early to talk about recovery.

For what we are experiencing right now in the market, as what I pointed out in my recent blog post, this is at most a dead cat bounce.

It may sound sarcastic. But when the real market recovery finally comes, the media may shy away from reporting it or simply ignore the good news. Even buyers doubt whether the good numbers in the recent quarters are sustainable.

Lastly, if you really want to see the “signs of recovery”, go look for some cold hard data. You will surely find them far more reliable than qualitative comments from some upbeat analysts.

This article was first published at

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